It is interesting that we tend to go through cycles. We started off with big centralized computers and relatively dumb terminals. Now with the rapid growth in Smartphones, the expected success of Smartbooks and Smart-Tablets (like the rumored iSlate), and the proliferation of devices like plug computers we appear to be facing a future that looks a lot like our past.

Like with any change, vendors that are in power this decade may not be in power in the next decade unless they significantly change how they think about the market. Companies that had their roots and beginnings in large systems like EMC, HP, and IBM may have advantages in terms of services, structure and systems. But they will still have to deal with the individual users who arent planning on giving up any power.

Companies like Apple and Microsoft, which started off more user focused, will need to better embrace the concepts of big centralized systems or be trivialized by them. This, of course, provides a unique opportunity for new companies - like Google  to come in and dominate what is coming because they can grow into the business. But they still have to roll over the other players.

Lets chat about whats coming.

Services-Based Computing

Weve called this by a lot of names over the years, with the The Cloud being the current tag we are putting on a very old idea. But the reality is that what is coming is a computing experience that is more services oriented than hardware or software oriented. Its one that you will likely increasingly be paying for over time.

If you think back, that is how Mainframe computing started. One of IBMs greatest mistakes was to shift from what was largely a leasing/services model and move into a sales model. The company did this because the latter didnt assure customer loyalty and the customers found other more attractive vendors to work with.

The danger of services-based computing is that it follows more of a utility model, which means very quickly growth can become illusive. Firms then want to go back to selling stuff, which takes what was a steady income and profit and puts it on more of a quarterly and yearly rollercoaster.

In the near term, however, we should see improvements in being able to match costs to revenues, a massive potential reduction in capital expenditures, and fewer financial surprises.

Public vs. Private Cloud

Unlike the typical battle between vendors, the fight to watch will be the battle between low-cost Public Cloud services and potentially more reliable and more secure but higher cost Private Cloud alternatives.

I doubt there will be a definitive winner here. But I expect the Private Cloud efforts will be defined by better performance and fewer problems while the Public Cloud efforts by lower costs, breaches, and performance issues.

Some companies and public entities will accept the risks associated with the Public Cloud to gain the financial benefits for some or all things, while others will prefer the Private Cloud for its advantages and find the benefits worth the extra cost. Undoubtedly there will be mistakes on both sides and the challenge will be to properly balance the savings and benefits so that the decisions appear reasonable.

Is Google or EMC the New Kingmaker?

This would seem a very strange question given how different the two companies are. The firms fall solidly in opposite camps during this Private vs. Public Cloud battle. Google needs the stature of an enterprise vendor but if they try to become one they could repeat Microsofts mistake and lose much of what made them the darling of the 2000s. This would be just like Microsoft lost much of what made them the darling of the 1990s by focusing too much on the enterprise this decade.

For EMC, it has to step up to the other side and embrace the power of the line manger who took control of most of the technology spending this decade. EMC has a fabulous focus on customer satisfaction that leads their segment. But they now need the breadth to reach down into the decision makers who may currently find it vastly simpler to go in the direction of the Public Cloud. However, if they drift too far in that direction they could damage their enterprise advantage.

Both companies could close the gap with partners and, if this is the case, EMC has the advantage because they currently partner better at this level than Google does. Yet that may be changing as Google expands into the PC OEM base with Android.

A Google/Dell, Google/Lenovo/ThinkPad, and particularly a Google IBM partnership focused on this market could be very powerful as it expands into this new market. What would be interesting on EMCs side would be a partnership with Apple. (But given Apples partnering history I wouldnt bet on a long tenure for the poor sucker who had to manage that relationship).

Wrapping Up

In the end, while EMC and Google likely to best define this fight, neither is yet ideally suited to play in a world with both Public and Private Cloud elements. Much like the last decade was defined, at least in business, by interoperability, this new one is likely to be defined by partnerships. These partnerships might be ones we couldnt have imagined before, with solutions that are a blend of Public and Private components.

It is interesting to note that of all the companies Microsoft is likely the only one that has a full blend, with Azure, of all of the software elements and interoperability practices to become the major power for the next decade. It would require an effort like .Net or their original push to the Internet to do this. Perhaps this will be Steve Ballmers biggest test, can he, like Bill Gates did, turn the company on a dime.

Well see, but one thing is sure, when this coming decade is over the surviving players wont look anything like they do today. Even Apple, the shining star of this decade, will have to change to reflect the coming New World.

I hope you all have a wonderful New Year and that the decade to come provides what you hope and need. Thanks for reading and staying with me this year!

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